"Based on machine$-$hours.

During June, the plant produced $5,000$ pools and incurred the following costs:

a$.$ Purchased $21,500$ pounds of materials at a cost of $$3\mathrm{.}25$ per pound.

b$.$ Used $16\mathrm{.}300$ pounds of materials in production, $($Finished goods and work in process inventorles are insignificant and can be

ignored.$)$

c$.$ Worked $4\mathrm{.}600$ direct labor$-$hours at a cost of $$7\mathrm{.}10$ per hour.

d$.$ Incurred variable manufacturing overhead cost totaling $$10,890$ for the month. A total of $3,300$ machine$-$hours was recorded.

It is the company's policy to close all variances to cost of goods sold on a monthly basis.

Required:

Compute the following varlances for June:

a$.$ Materials price and quantity variances.

b$.$ Labor rate and efficlency variances.

c$.$ Variable overhead rate and efficlency variances.

Summarize the variances you computed in requlrement $1$ by showing the net overall favorable or unfavorable varlance for the

month.

Complete this question by entering your answers in the tabs below.

$1$a$.$ Compute the following variances for June, materials price and quantity variances.

$1$b$.$ Compute the following variances for June, labor rate and efficiency variances.

Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant is experiencing problems as shown by its June contribution format income statement below:

Flexible Budget Actual

Sales $(5,000$ pools$)$ $ $260,000$ $ $260,000$

Variable expenses:

Variable cost of goods sold$*84,50098,865$

Variable selling expenses $17,00017,000$

Total variable expenses $101,500115,865$

Contribution margin $158,500144,135$

Fixed expenses:

Manufacturing overhead $65,00065,000$

Selling and administrative $83,00083,000$

Total fixed expenses $148,000148,000$

Net operating income $($loss$)$ $ $10,500$ $ $(3,865)$

$*$Contains direct materials, direct labor, and variable manufacturing overhead.

Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to $$get things under control.$$ Upon reviewing the plant$$s income statement, Ms$.$ Dunn concluded the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool:

Standard Quantity or Hours Standard Price or Rate Standard Cost

Direct materials $3\mathrm{.}3$ pounds $ $2\mathrm{.}80$ per pound $ $9\mathrm{.}24$

Direct labor $0\mathrm{.}8$ hours $ $7\mathrm{.}40$ per hour $5\mathrm{.}92$

Variable manufacturing overhead $0\mathrm{.}6$ hours$*$ $ $2\mathrm{.}90$ per hour $1\mathrm{.}74$

Total standard cost per unit $ $16\mathrm{.}90$

$*$Based on machine$-$hours.

During June, the plant produced $5,000$ pools and incurred the following costs:$1$c$.$ Compute the following variances for June, variable overhead rate and efficiency variances.

Note: Do not round your intermediate calculations. Indicate the effect of each variance by selecting $"F"$ for favorable, $"$U$"$

for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).$ Input all amounts as positive values.

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